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March 24, 2008
Read the fine print: ESDC gives Ratner 6+ years to build arena, 12+ years for Phase One
Atlantic Yards Report
Norman Oder takes a look at the "State Funding Agreement," a very important document that the Empire State Development Corporation finally made public last Friday, after the story about project delays broke in The NY Times.
The Agreement outlines the project timeline, details developer Forest City Ratner's obligations and specifies any remedies if the Atlantic Yards project is significantly altered or abandoned:
How long might Atlantic Yards be stalled? In the New York Times's coverage Friday of the Atlantic Yards stall, developer Bruce Ratner would "not specify the kinds of delays possible, but suggested that construction could be put off for years."
The Times apparently didn't check with the Empire State Development Corporation (ESDC), but the state agency has been talking out of both sides of its mouth.
The General Project Plan, approved in December 2006 by the ESDC, stated (right) that Phase 1 of the project was "anticipated to be completed by 2010" and Phase II was "anticipated to be completed by 2016." However, nine months later, in September 2007, the ESDC signed a funding agreement that gives developer Forest City Ratner much more time and also posits a scenario in which much less housing and open space would be built.
The details:
Ratner would have six years to build the arena after the close of litigation and the ESDC's exercise of eminent domain to acquire needed properties.
Ratner would have 12 years to build the five towers of Phase I after the close of litigation and the ESDC's exercise of eminent domain to acquire needed properties.
Ratner would have an unspecified amount of time to build the eleven towers of Phase II, with an option for the ESDC to buy back the land from the developer.
Should the project be abandoned, the city might pursue a plan that would bring 1845 units of housing 646 of them affordable, and 2 acres of open space, as opposed to 6430 units, 2250 of them affordable, and 8 acres of open space.
...
What are the remedies if Forest City Ratner wants to walk away? The document states that if FCR abandons the project before the Effective Date--before litigation is closed--the developer would have to pay back the ESDC the "Required Amount."What's the "Required Amount"? The state payments, plus interest, plus Liquidated Damages.
Again, we don't know what those Liquidated Damages are. It's time to see the City Funding Agreement.
Though City Councilman David Yassky has asked to see the City Funding Agreement, the "document has yet to surface publicly."
Posted by lumi at March 24, 2008 5:39 AM